Well, hello and welcome. Thank you guys for being here today. Um, I guess you have a great ETHComp? Okay, that's what I like to hear. Congratulations to the ETHGlobal team Congratulations to the ETHGlobal team .
They are doing a great job with this event. I'm very proud of these guys. I taught them everything I know. Falsehood. Um, my name is Adam Bozan, and as mentioned, I'm the Senior Director of Global Community at Circle.
Um, I'm really excited to have this conversation with Sam today. We are tracking one of the most compelling convergences in modern technology modern technology . How do you like this preparation for the start, huh? The intersection of institutional finance, decentralized networks, and massive computing scales. The topic of our conversation today is the state of Ethereum, how TradFi is entering this space, and how the physical infrastructure is evolving to enable its operation.
To figure this out, we were joined by someone who is uniquely positioned at the intersection of these worlds. He is a graduate of Oxford and Columbia University Law School, a former attorney, and a veteran in the digital asset space. Today, he leads two companies that bridge the digital and physical worlds, scaling massive Ethereum staking operations while building cutting-edge high-performance computing infrastructure powered by artificial intelligence. Pretty cool. Please welcome the CEO of Bit Digital and White Fiber, Sam Tabar.
Sam, how are you? Thank you for inviting me. Of course. I... I Of course.
I... I hope I understood everything correctly. Was that accurate enough? Good. I spent a lot of time on this, so I appreciate it.
Hmm, but before we get into the state of Ethereum, data centers, AI infrastructure, um, all of these interesting things, I'd like to start with a question that's a bit like an introductory question. I think it's pretty fun to do things like that, right? Let's do this. So you grew up in Canada, huh? Never heard before...
never heard a joke like that before . Yes, yes, I know. Everyone is like, "Boo, get him off the stage." Hmm, you're the son of a car mechanic and a Tarot card reader. That's pretty cool.
Is that accurate? My mother had a very spiritual side. She read Tarot cards. My father was a car mechanic. That's right .
Oh, great. OK. My grandfather was a car mechanic, so I got along with you behind the scenes. It's in our family. That's it.
That's it. Hmm, studied law, we mentioned, or studied mentioned, or studied , uh, studied law at Oxford and Columbia. Go ahead, Lions. Hmm, and now you run not one, but two public companies in digital assets and artificial intelligence infrastructure. Impressive things.
Looking back on this unique combination of logic and mechanics from your father and intuition or foresight from your mother, what aspect of that upbringing do you think influences your decision-making or leadership style more than navigating, uh, more than when you navigate complex, fast-moving industries like artificial intelligence or cryptocurrency? I didn't expect such a question. Although I feel you are uniquely positioned for this. Yes. I mean, um Yes.
I mean, um , so the question is: my mother, who has a lot of intuition, and my father, who was an old-school auto mechanic , who, as you ask, had a bigger influence on my worldview and how I've built my professional career. I mean, first of all mean, first of all , I've never been asked this question. I think that more and more following your intuition is what we all need to do here in this room. Um, too often we don't do that, and if what you do is a disconnect between that and your intuition, most of the time you're going to fail, and so, you know, I went to law school, and it wasn't intuition, it was more logical. And it turned out that I was actually a pretty bad lawyer, so I stopped doing it and started following my intuition.
I moved to Japan. I joined a small- cap company that invested in various strange alternative investment strategies. In short , since I left my legal career, I have followed my intuition in my career, and it has served me quite well . So, thank you, Mom. Mom, give moms their due, okay?
We all love our mothers. Thank you for listening to me. I'm glad I didn't , it was great. Um, diving right into the main macroeconomic picture, namely the state of affairs with Ethereum. Many people in traditional finance treat ETH solely as a digital asset for trading or view it through the lens of traditional currency.
But you rejected it. You argued that the monetary system has always been wrong when it comes to Ethereum. So, if viewing Ethereum solely as money or a means of saving is missing the forest for the trees, what is the correct system? What actual metrics, infrastructure developments, or use cases are you currently observing that will help you assess the true health and growth of the network? Well, to take a step back, Bitcoin is the mother coin and it has the first mover advantage.
That's why she's quite well known. And, uh, it's just a means of saving, and Bitcoin competes directly with the gold markets. The market capitalization of gold markets worldwide gold markets worldwide , I think, is about $16 trillion . And Bitcoin is only part of that. So, Bitcoin still has some time to become a means of saving.
Eventually, it will engulf the gold markets. And I understand that there are a lot of cyclical fluctuations in Bitcoin and Ethereum, but structurally speaking, generations, and I'll give you an example of why I know that structurally things are going to go up for cryptocurrencies. Most of these institutional investors, the people who make decisions in portfolio management, are boomers. They will die. Generation X and millennials will take it on .
They will control the levers of power when it comes to portfolio formation. And this generation, Generation X, millennials, Generation Z, have completely normalized cryptocurrency. And they will realize that this useless gold metal has a much lower value as a store of value than, for example, Bitcoin or Ethereum. I'll move on to Ethereum in a moment. So, ultimately, cryptocurrency will become part of building a family office portfolio, will be a responsible part of how to hedge against inflation, and the realization that gold is actually a worse way to do it, and cryptocurrency, Bitcoin, and Ethereum are a Bitcoin, and Ethereum are a much better way.
So, Bitcoin competes with gold markets. Ethereum, as everyone here understands, is programmable money. Bitcoin is not programmable. And that's why Ethereum competes with the financial system. The is just a bunch of intermediaries.
They make a lot of money on the grid. They come between you and me. Every time I try to send you money, they take a little bit off the top, and they take on that friction. Ethereum that friction. Ethereum , through smart , through smart contracts, removes this friction, eliminates intermediaries.
I understand that everyone here knows this. But it's really important to just take a step back and understand that I view Ethereum more as a utility computing layer. That's the metric I'm looking at. And so when you see stablecoins or real assets being tokenized, they are not being tokenized to Bitcoin. As I said before, Bitcoin had the first mover advantage, but Ethereum will eventually catch up to it, and I believe ETH will eventually be seen as a better store of value compared to Bitcoin because it is programmable; it has utility, so I just look at the settlement activity behind it, and that's an indicator.
And if you look at the data, regardless of the fact that ETH is not doing very well right now , the metrics, development activity, etc. are actually quite favorable, and there is a gap there, and that is an opportunity. But keep in mind that I am exaggerating somewhat by mixing ETH with ETH. It seems like there is a difference between price action and Ethereum settlement levels. There is also a correlation, but I realize I am somewhat confusing the two concepts confusing the two concepts .
I'll just be intellectually honest. No, I like this perspective, and the reality of boomers dying. I quote this. Hmm, this is important because they were actually the resistance, the bottleneck of this institutionalization, from Elizabeth Warren to Warren Buffett, you know, these people were unfortunately quite hostile to cryptocurrencies for a number of different reasons. This is beyond the scope of this discussion, but they will die and we will take power again, and once that happens, you will see that generation after generation, cryptocurrency will become much more institutionalized institutionalized .
She is already becoming like that. But time is our friend, and so it is . Hmm, circle of life, right ? Hmm, so let's take this macro view of the network and see how it reflects on your corporate strategy. Hmm, under your leadership, Bit Digital has undergone a massive transformation.
You transferred money from mining Bitcoin on the outdated Bitnote, creating a huge treasury of over, I don't know if that number is accurate, 158,000 Ethereum. Is that accurate? That's true. We were... That's true.
We were... Excuse me, are we done with the question? Oh no, no, I was...I was, I was just writing the foreword. I thought, "I just want to make sure I got this number right."
Um, that's the right number, and I bought a large stake in White Fiber to scale AI data centers . In addition . In addition , you stated that Bit Digital is , you stated that Bit Digital is no longer just a digital asset management company, but a company with strategic assets. So, for everyone here, including me, how do you define the difference? How is a strategic asset company fundamentally different from a digital asset management company?
Okay, I won't be alarmed. So, digital asset management companies—that's essentially what they did: they bought their shell, placed a bunch of Ethereum on the balance sheet of that public shell, and that's it. This is a beta version. The strategy is special, just buying ETH and holding it. It's not that it's not a strategy it's not a strategy .
This is a beta version. So, we've done everything to be much more alpha- alpha- positioned, and just to take a step back, we were once a Bitcoin miner. And I announced to the capital markets and to tens of thousands of our shareholders that we are selling our Bitcoin, and we are no longer that, and we are completely switching to Ethereum. I'm not sure if you're familiar with the Bitcoin community, quite...These Bitcoin Maxis are pretty toxic.
So the capital markets were throwing a bunch of digital tomatoes at me, on Twitter or X, whatever you want to call it. Uh, that took courage. We were the first to do it, and then everyone else followed suit. And, uh, lo and behold, it worked. Uh, what was your question?
Oh, uh, just a difference, like how do you define a difference. The difference between a strategic asset company and a digital asset management company is that Dots simply buys ETH and puts it on the balance sheet, and that's what they do. What we do is we sell all our Bitcoin. At that time, we were a proper operating company. We sold all our Bitcoin.
We bought ETH. And then, in relation to one of our subsidiaries, which was an AI infrastructure development company, so when I first used ChatGPT a few years ago, it was a couple of years ago, 2 and a half or something like that. I was in Singapore, and I thought, “Holy crap thought, “Holy crap , this is a ChatGPT moment, right? This is a eureka moment. "This is wild technology."
And I realized that this would be the third catalyst for the industrial revolution. The first catalyst is electricity. It changed the industrial revolution. And the second catalyst is the Internet. He changed everything.
And now it's artificial intelligence. So I asked my colleagues, I asked my colleagues, "How can we get involved in this?" And I realized that what artificial intelligence provides, what ChatGPT provides, are data centers. And, well, Bitcoin miners are pretty familiar with data centers. But building a data center for AI and building a data center before Bitcoin—it's like Honda versus Lamborghini— like Honda versus Lamborghini— they're very different cars.
Uh, we did n't know that back then, so we were wrong to think that the trend towards skills had supposedly moved to a new level. Uh, we overcame that illusion by acquiring Aqua, hiring certain types of teams and companies, and now, uh, we have these data centers that we've built, uh that we've built, uh , for very well-known companies like Cerebras and Enscale. We have billion-dollar contracts with our customers, and this company, this subsidiary, became so successful that we decided to IPO this subsidiary, and we called it White Fiber. Uh, and just to tell you, the reason for White Fiber is that we have dark fiber under our feet, and we are essentially converting that dark fiber into white fiber. In white fiber.
In any case, we conducted an IPO of this subsidiary. And now it is much higher than it was at the debut IPO. And thus Bit Digital owns 70% of White Fiber. The remaining 30% 70% of White Fiber. The remaining 30% are in open circulation.
And that's how we position ourselves compared to Bit Digital owning Ethereum. We make it into a steak. We also own 70% of We also own 70% of White Fiber, which is listed on Nasdaq. And third, we are borrowing funds against our Ethereum to fund White Fiber. For example, we lent $100 million to White Fiber so we could build and accelerate the development of data centers.
And we did it by borrowing funds under Ethereum, so we continue...We don't want to sell our Ethereum. So we borrowed against it, continue our exposure, and get even better returns from staking thanks to the interest on the White River loan. So, that's kind of the alpha position you want to be in, and that's why we've outperformed the others by a significant margin. Go on your iPhones, you can look at BTBT on Nasdaq and compare it to S bet and BM&R, and even Ethereum did.
So, that's what we did, and so far so good. I'm going to deviate from the script because I'm just curious myself. I never had the opportunity to attend one of them. What was Nasdaq launch day like? Was it something like pomp and circumstance?
Did they roll out the red carpet? What was the atmosphere like? Honestly, it was the best day of my life. I I I Yes, that's true. Hmm, I was my brother, I was with my brother, who is somewhere in the audience who is somewhere in the audience .
And uh, and uh, it was... . And uh, and uh, it was... Sure, there was some pomp and circumstance, but, you know, ringing that bell and just walking through the halls of all of this and just creating a public company that would outlive me after I died and the company would continue to exist. This...
This...This... exist. This...This...
This... This... This feeling... It's a really nice feeling to build something that can continue after you. But you have a child, right ?
So it's the same. Yes. It was...It was a good atmosphere. We could talk about kids all day, but, uh, but no, I...
I think my invitation got lost in the mail because of that. But next time, when the company launches, I want to be there. Can I...uh...Can I get a promise on stage that you'll invite me?
I...honestly, I would n't recommend doing an IPO. It really does take 10 years of your life, so okay, fair, fair. That's fair. Um, so we covered a lot today .
Um, let's finish some questions. Um, as you look out at the horizon, um, if we're sitting here um, if we're sitting here , you know, ETHComp 2027, a year from now, looking back at the next 12 months, uh, what does the next phase of growth and success look like for Ethereum, you know, continuing this? Um, what does a successful year look like for Bit Digital and White Fiber? So, those are two questions. First, what do I want, if where do I want to see Ethereum next year, and where do I want to see Bit Digital next year?
Well, yeah, I mean Well, yeah, I mean , as far as Ethereum is concerned, there are a lot of long-tail coins like Solana and others that, you know, they break, and Ethereum doesn't. I think the race for programmable money has already been won. Um, Wall already been won. Um, Wall Street has already chosen Ethereum Street has already chosen Ethereum . I don't think the world has priced that in yet.
All these other chains All these other chains are essentially speculative bets and will not be institutional. Sorry for the noise. So, I think that's what I'd like to see next year, when there's finally a realization that Wall Street has already picked its horse, and that's factored into the price. And regarding Bit Digital, I just want to make sure that what I'm saying is true, which is that we can operate regardless of the direction Ethereum goes. And so, uh, the way we position ourselves is that we get an advantage when ETH goes up, and when ETH goes down or falls, we continue to do well because we have a 70% because we have a 70% ownership in White Fibre, which is building data centers for the third industrial revolution catalyst.
Oh, I love that phrase, the third catalyst of the industrial revolution. You have some good quotes. I hope you're tweeting about it now. Or " tweeting about it now. Or " baptize", you know, I do n't know what they're saying anymore.
Do you still say tweet? Do you just say "cross"? They seem to be saying "publish now". I prefer tweets. It sounds more like a sound.
The feeling, yes, it's like vintage. It's like, you know, buying some cool stuff at a flea market. Yes, a little vinyl, yes. Um, okay, so I think we have enough time for a quick lightning round lightning round . Do you guys want a lightning round?
I heard "yes". Everything is "yes". Okay, we'll do a lightning round. So, this is just a one- word question in advance, so I'm just letting you know letting you know . Not prepared for any of this.
Let's. Yes, yes, yes. So, this could go off the rails. We will find out. And if you want to add something, you can.
We have a little time. But, um, first of all, I think we all know the answer. Bitcoin or Ethereum? Let's. I won't even answer that question.
He is like this: next. Where can we invite another moderator here? Um another moderator here? Um , okay, I think you'll actually like this one. The biggest threat from AI: job loss or government surveillance?
Definitely state surveillance. That's the only thing I'm really worried about, because the algorithm never dies. Fascists are dying. So, in terms of AI, this is what really keeps me up at night. I actually think about it sometimes before I go to sleep, that, you know, I'm contributing to something that's expanding the possibilities of something that's potentially enslaving humanity.
I'm worried about this. This is not one word. Sorry. No, no, that's normal. And I'm like, "I'm glad to end on this, because it's a dark note, but, um, I understand you, and I agree with you."
Uh, secured debt or unsecured debt? Unsecured debt. If you have secured debt, it's a death sentence. Unsecured debt, definitely. Good.
Oxford or Columbia? Oxford. Oxford, why, why is that? Well, there are no classrooms in Oxford . This is individual training.
Yes. And, uh, I remember studying at Oxford for 4 years. It was a lot like Harry Potter, believe it or not Potter, believe it or not . In fact, you have to wear tuxedos to dinner. And, uh, there are no audiences there.
These are truly personal meetings with your teacher. He is called a lecturer, not a professor. You meet with him or her twice a week. You have a bibliography and you should review it. And what you do for an hour and a half twice a week is that the professor just bombards you with questions and says, " questions and says, " Okay, what's your opinion on this?"
And I answer her. And then she says, " then she says, " Okay, I want you to take the opposing view and argue for it." So, I was married to the first thought, and now she wants my brain to go in a different direction. And so I would have to do it, and it was very Socratic. She argued a lot with everything I said, but after 4 years of this, you get used to being detached from your own views and just agnostically defending certain positions.
Very cool. Yes. Um, okay, one last thing, we're on time. Um, a better predictor of the future, financial data or Tarot cards? I think financial analysis is a lot like horoscopes.
You have these charts and so on, so you know. She lived the same, she lived the same. She lived. Well , thank you, Sam. Thank you to everyone who joined us.
We are on time. Have a nice stay at EthCC.
Automatic transcript — names and jargon may be misspelled.